A proud praise for China's resilient growth

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A proud praise for China's resilient growth
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2024-08-08 16:37

The International Monetary Fund welcomes China's "resilient economic growth and the post-pandemic recovery in private consumption", according to a new report.

Each year, an IMF team visits China and other countries to collect economic and financial data and discuss with officials of each country their economic developments and policies. On Friday, the IMF released the final report for China's 2024 Article IV Consultation.

China's economy has remained resilient, even though the property sector is experiencing ongoing difficulties, the report said. It noted that the nation's GDP grew 5.2 percent in 2023 and, during the first half of 2024, grew 5 percent year-on-year.

Driven by China's strong economic data from the first quarter, the IMF increased its forecast for the nation's annual economic growth to 5 percent this year, an upward revision of 0.4 percentage points compared with the projections released in the IMF's "World Economic Outlook" report in April.

This expectation aligns with China's goal, announced earlier this year, of reaching around 5 percent economic growth in 2024.

The IMF's directors emphasized downside risks from the ongoing adjustment in the property market and the drag from local government debt.

As part of the reform priorities set during the third plenum of the 20th CPC Central Committee, the plan includes lifting market restrictions while ensuring effective regulation to maintain market order and address market failures. These efforts aim to balance market freedom with necessary oversight to promote economic growth and stability.

Furthermore, the organization recommended that China adopt a neutral fiscal stance in 2024 to boost consumer confidence and domestic demand, with a shift toward household support and a more progressive tax regime. They suggested reducing the fiscal deficit starting in 2025 and emphasized the need for fiscal consolidation and reforms to stabilize public debt.

The IMF also noted China's "constructive role" in addressing global challenges, such as supporting debt restructuring in low-income countries and tackling climate change.